Back to top

Image: Bigstock

Coca-Cola (KO) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Coca-Cola (KO - Free Report) closed at $56 in the latest trading session, marking a -0.23% move from the prior day. This move lagged the S&P 500's daily loss of 0.15%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq lost 0.24%.

Heading into today, shares of the world's largest beverage maker had gained 3.14% over the past month, outpacing the Consumer Staples sector's gain of 2.22% and lagging the S&P 500's gain of 3.88% in that time.

Investors will be hoping for strength from KO as it approaches its next earnings release. In that report, analysts expect KO to post earnings of $0.43 per share. This would mark no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.86 billion, up 25.47% from the prior-year quarter.

Any recent changes to analyst estimates for KO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. KO currently has a Zacks Rank of #3 (Hold).

Investors should also note KO's current valuation metrics, including its Forward P/E ratio of 25.02. This valuation marks a premium compared to its industry's average Forward P/E of 20.05.

Meanwhile, KO's PEG ratio is currently 3.82. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Coca-Cola Company (The) (KO) - free report >>

Published in